Business myths, music, and money

TL;DR

• ?? The great con of NLP.
• ?? David Bowie - The king of authenticity
• ?? Should startups generate service revenue?

BUSINESS

NLP is bull??

Neuro-linguistic programming, distinct from natural language processing in computer science, claims to be a universal solution for personal growth and therapy. Companies also use it for employee and management development.

NLP suggests that tweaking how we think (neuro), talk (linguistic), and act (programming) can miraculously improve various aspects of our lives.

For example, a company might hold NLP workshops to improve teamwork by teaching employees to recognize and adapt to different communication styles.

The "Neuro" part involves understanding employees' thought processes.

The "Linguistic" part focuses on using and adapting their communication styles. "Programming" changes habitual responses to improve interactions.

Sounds plausible, right?

The thing is, there is no scientific proof that NLP works as advertised.

In the '70s, Richard Bandler and John Grinder introduced NLP, fusing various theories into their pseudoscience.

Bandler, known for promoting NLP with claims like curing schizophrenia or boosting attractiveness, impressively turned these crazy statements into a lucrative industry, despite skepticism.

NLP enthusiasts are not worried about the lack of proof.

They like its simple, practical approach better than harder, evidence-based methods. The quick, easy certification that lets them start selling services after just a week-long crash course is also a big draw, avoiding strict checks.

If it sounds too good to be true, it is.

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So, in a nutshell:

• NLP is about as scientific as astrology.
• They recycle old psychology ideas, selling them as new.
• Anyone can become a practitioner in a couple of days.
• The entire thing gives out a culty vibe, with Bandler as the great leader, who can make no mistakes.

I’m a psychologist and I like science, so for me, this is personal.

If you or your business need coaching or therapy, try Cognitive behavioral therapy (CBT) instead. It's not promising miracles as NLP, but it sure as hell works.?

Vjeko

HERO OF THE DAY

???? David Bowie - the endless innovator

One of the most successful musicians in the 20th century, actor, painter, writer, and art collector, David Bowie did it all, and he did it amazingly well. Always one step ahead of everyone else, he rebelled with style and started trends not just in music, but in fashion, business, technology, and social norms.? ?

Bowie was a true visionary who reinvented himself and his art several times in his career. And he was a genius in all his roles: Major Tom, Ziggy Stardust, Aladdin Sane, The Thin White Duke, Halloween Jack… ?

Besides being a music genius and selling 140 million records while loved by the critics and the audience, Bowie was also an innovative businessman and one of the first to onboard new tech.

Here are a few cool facts about him:

• He issued Bowie Bonds - in a crazy financial move in 1997, he sold asset-backed securities of his future album royalties, pioneering a new form of artist financing (NFTs, anyone?).
• He started his Internet Service Provider - In 1998, Bowie launched BowieNet, an ISP that offered fans exclusive content, early access to music, and an online community. It was practically a social network before social networks.
• He was the first to sell digital music - in 1997, he released his single "Telling Lies" exclusively as a digital download, years before anyone else.?
• He turned down his knighthood - in 2003, he gave the Queen a cold shoulder, by refusing knighthood, saying: "I seriously don't know what it's for. It's not what I spent my life working for".

Here's my favorite clip of Bowie from his interview back in 1999. Even back then he saw the Internet as something that would completely shake up how we connect, create, and consume content.?

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Bowie taught us that to become better, we need to be ready for constant change.?

And that there are no downsides to being true to yourself.?

Vjeko

SOFTWARE

?? Why SaaS startups shouldn't shy away from service revenue

Revenue from professional services in a startup is a very contrarian thing. VCs roll their eyes at the mention of service revenue. It often happened to us.

And I get it.?

They are afraid of “startups” doing custom engineering for every customer. Meaning they don’t have a product. Also, service revenue is non-recurring, has much lower margins, and is less scalable.

Even college kids know this (I hope).

However, professional services are great for startups building a complex enterprise product. This is why:?

• You will make sure your product is adopted company-wide.

If you sell the product and move on, there is a high probability of failure. Most enterprise startups are competing against large incumbents. They have an army of consultants directing the customer away from your product. Be there. Be the strategic advisor for your customer.

• You will only build the necessary features.

At first, the Customer Success team will do many things manually. A repeating problem costing the CS a lot of time is a feature worth building. You get the knowledge from your team - from the trenches. At almost zero feature waste.

• Doing services is preparing you to hand over the baton to partners.

Professional consulting companies can be a great scaling mechanism. They want to know that: a) There is money to be made in implementing your product b) There is a cookbook for doing it

• Service revenue is good for cash flow.

Service revenue can help keep you afloat in the early days. It is often as high as the license contract. This means you are doubling your runway.

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This doesn’t mean we are behaving as a service company. Our key focus is the product and its adoption on the market. Our goal is to have the customer onboarding time asymptomatically approaching zero.

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But some customers will always want a white-glove service. It's our job to make sure there are enough great teams to help them succeed.

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Matija

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